Academia

Romer's research on economic growth followed extensive studies of long-run growth during the 1950s and 1960s.[12] The Solow–Swan model, for example, established the primacy of technological progress in accounting for sustained increases in output per worker. His 1983 dissertation, supervised by José Scheinkman and Robert Lucas Jr., amounted to constructing mathematical representations of economies in which technological change is the result of the intentional actions of people, such as research and development. It led to two Journal of Political Economy articles published in 1986 and 1990, respectively, which started endogenous growth theory.

Business

Romer temporarily left academia in 2001 to found Aplia, a company which produces online problem sets for college students; Aplia was purchased in 2007 by Cengage Learning.

He is credited with the quote "A crisis is a terrible thing to waste," which he said during a November 2004 venture-capitalist meeting in California. Although he was referring to the rapidly rising education levels in other countries compared to the United States, the quote became a rallying concept for economists and consultants looking for constructive opportunities amid the Great Recession.[13]

Charter cities

Romer has attempted to replicate the success of charter cities and make them an engine of economic growth in developing countries. He promoted this idea in a TED talk in 2009,[14] and he has argued that with better rules and institutions less developed nations can be set on a different and better trajectory for growth.[15] In his model, a host country would turn responsibility for a charter city over to a more developed trustee nation, which would allow for new rules of governance to emerge. People could "vote with their feet" for or against these rules.[9]

The government of Honduras considered creating charter cities, though without the oversight of a third-party government, which some argue is neo-colonialism.[9] Romer served as chair of a "transparency committee" but resigned in September 2012 when the Honduran government agency responsible for the project signed agreements with international developers without involvement of the committee.[16]

Nobel Memorial Prize in Economics

Paul Romer during Nobel press conference in Stockholm, December 2018

Romer shared the 2018 Nobel Prize with William Nordhaus.[20] In choosing Romer as one of the 2018 economics laureates, the Royal Swedish Academy of Sciences stated that he had shown "how knowledge can function as a driver of long-term economic growth. . . . [Prior macroeconomic studies] had not modelled how economic decisions and market conditions determine the creation of new technologies. Paul Romer solved this problem by demonstrating how economic forces govern the willingness of firms to produce new ideas and innovations."[2]

After receiving the prize, Romer described how he started thinking about the relationship between growth and innovation:
"The question that I first asked was, why was progress . . . speeding up over time? It arises because of this special characteristic of an idea, which is if [a million people try] to discover something, if any one person finds it, everybody can use the idea."[21]

^"Chile complains of World Bank unfair treatment". BBC. 15 January 2018. Retrieved 8 October 2018. In an interview given to the Chilean newspaper El Mercurio, the World Bank economist who had been responsible for the rankings, Augusto Lopez-Claros, said changes in methodology "took place in a transparent and open context," denying any political bias.

^Oscar Medina; Andrew Rosati (13 January 2018). "World Bank to Probe Chile's Business Ranking After Bias Alleged". Bloomberg. Retrieved 8 October 2018. Chilean economist Augusto Lopez-Claros, who was in charge of compiling Chile’s ranking for the World Bank report, said accusations of political manipulation were “wholly without merit.”